IndusInd Bank Home Loan interest rates link to the banks MCLR. The bank announces its MCLR every month. The rate of interest on the individual Home Loan depends on various factors like,
IndusInd Bank is a technologically advanced bank that allows its customers to apply for Home Loans online. The bank offers facilities to check out the eligibility and Home Loan EMI online.
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The Home Loan is an extended liability that could stretch to up to 30 years. The Home Loan amounts can be substantial, as well. Under such circumstances, the equated monthly instalment or the EMI is the ideal repayment option.
EMI comprises of two variable components, the interest repayment and principal repayment portions. As the principal amounts are substantial, the interest component on the Home Loans can account for more than 90% to 95% of the EMI value. Hence, it can take a long time for the principal repayment portion to catch up. Nevertheless, it is the best repayment option, as it suits the budget of the borrower. The other modes of payment, such as the Equated Instalments, can be challenging for the average borrower.
Another advantage of the EMI is that it remains constant for a particular loan amount, rate of interest (ROI), and loan tenure combination. A change in any of the three components can cause the EMI to vary.
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As the Home Loan stretches up to 30 years, it can become a challenge to calculate the EMI. One has to compute the interest for the entire tenure while considering the regular repayment at the same time.
The arithmetical formula for calculating the EMI of a Home Loan is EMI = [PR(1+R)^N] / [(1+R)^N-1] where:
A manual calculation can be tedious. Therefore, the best option is to use an EMI Calculator. IndusInd Bank has one such EMI Calculator on its Home Loan webpage. The calculator requires the customer to enter the necessary information like the loan amount, rate of interest, and the repayment period. Apart from providing the EMI amount, the calculator estimates the total interest payable on the Home Loan for the entire tenure.
|Expected Loan amount||Rate of Interest||Affordable tenure|
|1 Lakh||6.70%||10 years|
|EMI||Interest Payable||Principal Payable||Total amount payable|
|Rs. 1,146||Rs. 37,482||1 Lakh||Rs. 1,37,482|
Additional Info: Looking for 25 Lakh Home Loan? Check EMI & Apply.
Additional Info: Looking for 10 Lakh Home Loan? Check EMI & Apply.
The following three factors affect the EMI calculation:
|ROI||Rate - 6.70%|
|Amount/Tenure||10 Lakhs||25 Lakhs|
|10 years||Rs. 11,457||Rs. 28,642|
|20 years||Rs. 7,574||Rs. 18,935|
|30 years||Rs. 6,453||Rs. 16,132|
Additional Info: Looking for 50 Lakh Home Loan? Check EMI & Apply
EMI is dependent on the loan amount, rate of interest, and the IndusInd Bank Home Loan tenure. It will remain constant for a specific combination of the three variable factors. A change in any of the three constituents will bring a corresponding change in the EMI. The following circumstances can bring about a change in these individual factors.
Rate of Interest fluctuations
IndusInd Bank offers a floating rate of interest loans that link to the MCLR of the bank. The bank announces its MCLR every month. However, the rate of interest for the existing customers does not change every month. It depends on the MCLR reset frequency. With every reset, the applicable rate of interest on the current Home Loan will vary. A change in the rate of interest can bring a corresponding change in the EMI.
Ideally, the EMI should go up or down with a corresponding modification in the ROI. Any upward swing in the EMI can affect the immediate budget of the customers. Hence, IndusInd Bank offers the facility of maintaining the EMI constant while altering the loan repayment at the same time. In the case of an increase in the rates, the tenure gets extended and vice versa.
Prepayment of Home Loan
IndusInd Bank permits partial prepayment of Home Loans where borrowers can pay off substantial portions of their Home Loan liability. It results in the reduction of the principal amount portion of the loan. Thus, borrowers can apply to the bank for reducing their monthly EMI burden by restructuring their loan instalments. Such a scenario can result in the reduction of the EMI.
Pre-EMI Interest capitalisation
IndusInd Bank finances for projects under construction. These projects take time for completion. The disbursements are also distributed over a period. Therefore, the bank grants a moratorium on the EMI. However, IndusInd Bank continues to charge interest on the disbursed portion of the loan. This interest charged to the loan account before the commencement of the regular EMI is pre-EMI interest.
The borrower has two options. One is to service the pre-EMI interest monthly. Alternatively, he/she can request the bank to capitalise the interest. Under such circumstances, the principal amount will increase. Secondly, the applicable rate of interest on the loan will also change because of the extended moratorium. Both these factors combine to change the EMI.
Additional Info: Also check HDFC Home Loan EMI Calculator
The ever-improving technology has made it easy for customers to estimate their EMI and do other calculations online. One such EMI Calculator is available at the MyMoneyMantra.com website. The calculator works on the same principle as that of the IndusInd Bank Home Loan EMI Calculator. It not only helps customers determine their EMI but also enlightens them about the overall interest payable on the Home Loan.
Apart from the Home Loan EMI Calculator, the MyMoneyMantra.com website offers other calculators like the Balance Transfer Calculator and Prepayment Amount Calculator.
Customers can make use of MS Excel tables to calculate their Home Loan EMI. The formula is PMT(rate, nper, pv) where:
Additional Info: Also check SBI Home Loan EMI Calculator
IndusInd Bank Home Loan EMI Calculator offers facilities to calculate the total interest payable on the Home Loan for the entire tenure. Most of the Home Loan EMI Calculators do not provide this feature.
No, the IndusInd Bank Home Loan EMI Calculator does not provide the amortisation schedule. Hence, the borrower can't determine the interest and principal repayment component every month.
No, this calculator does not have provisions to account for the pre-EMI interest when calculating the EMI for the Home Loan.
Yes, the EMI calculation procedure is the same for all kinds of loans. Hence, the Home Loan EMI Calculator is useful for calculating the EMI of other loans, such as auto loans and personal loans.
Initially, the Home Loan calculation depends on factors like the loan amount, ROI, and loan tenure. The EMI remains constant for a specific combination of the three elements. Hence, there is no one principal factor that affects the calculation of the Home Loan EMI. A variation in any one of the three factors can modify the EMI.
As you have information about your income and other obligations, it is easy for you to determine the maximum EMI you can afford to pay for your Home Loan. Using this amount, you can do a reverse calculation (by trial and error method) to calculate the maximum Home Loan affordability.
The Home Loan affordability and eligibility don't need to be the same. The eligibility depends on various factors like your income, existing liabilities, your credit rating, and so on. The bank determines your eligibility after considering all these factors.
IndusInd Bank adds specific amounts such as insurance, processing charges, and the interest for the period before the commencement of the EMI while calculating your EMI. Hence, the amount stipulated by the bank can differ from what you estimate.
IndusInd Bank calculates Home Loan interest on the daily reducing balances. It is the most beneficial of all interest calculation methods.